It's been an exercise in diminishing returns for the Office of Hawaiian Affairs as it tries to collect its share of the state's ceded lands, crown lands and other property held by the Republic of Hawai'i before Hawai'i was annexed by the United States in 1898.

After a decade of miscalculations in which OHA once dreamed of getting a court-ordered settlement of $1.2 billion, the agency last week accepted a state offer of a sixth as much — land and cash worth about $200 million plus ongoing payments of $15.1 million a year.

The positive is that OHA, which was formed by the 1978 Constitutional Convention to better the lives of Native Hawaiians, finally knows what its resources are and can work on focusing its mission.

The 1959 Admissions Act making Hawai'i a state specifically designated the betterment of Native Hawaiians as one of five purposes for ceded-land revenues. OHA was created as a means to get Hawaiians their share.

In 1993, the state gave OHA an initial payment of $130 million, which has since grown in value to about $500 million.

But attempts to determine the remainder of OHA's entitlement have stalled in court battles and negotiations that have played out against a backdrop of lawsuits filed by non-Hawaiians accusing the OHA and other Hawaiian-preference programs of racial discrimination.

OHA seemingly got the upper hand in 1996 when former Circuit Judge Daniel Heely set its share of ceded-land revenues at $1.2 billion, which the state appealed to the Hawai'i Supreme Court as an amount that would bankrupt the treasury.

Despite Chief Justice Ronald Moon's hints that the parties should settle out-of-court, OHA rejected a 1999 offer from the Cayetano administration for $250 million in cash plus 366,000 acres of land — an asset base that would have increased immensely in value given the boom in the real estate and financial markets since 1999.

When the Supreme Court overturned Heely in 2001, OHA lost its leverage, and it's taken eight years to negotiate a new deal with the Lingle administration that leaves OHA with a relatively scant $13 million in cash and land worth $187 million.

While the deal, which still must be approved by the Legislature, doesn't give OHA near what trustees once could have gotten, it's probably the best they can do at this point and provides a basis for moving forward.

The lands involved include some choice parcels for future revenues, such as properties in Hilo's Banyan Drive resort area and the Kaka'ako redevelopment zone.

OHA trustees must now sharpen their vision on how to best use the resources to fulfill OHA's mandate to better the lives of Native Hawaiians.

The agency has had fingers in a lot of pies, such as acquiring Waimea Valley and Wao Kele O Puna to preserve Hawaiian legacy lands, and making numerous grants in support of Hawaiian culture, education, economic welfare, health, housing and social well-being.

But there have been few high-impact, statement-making initiatives that define what OHA is about.

OHA has devoted much of its energy and resources to winning passage of the Akaka bill in Congress to head off legal challenges to its existence, and organizing a Hawaiian sovereignty campaign through its Kau Inoa registration program.

But there are questions about whether OHA, as a state agency subject to the scrutiny of the governor and Legislature, can independently lead a movement for Hawaiian self-government.

Some legislators responded to the ceded lands settlement by noting that resources transferred to OHA still belong to the state since OHA is a state agency, and perhaps lawmakers should provide more oversight of OHA's spending.

David Shapiro, a veteran Hawai'i journalist, can be reached by e-mail at dave@volcanicash.net. Read his daily blog at blogs.honoluluadvertiser.com.